Implementing high-powered contracts to motivate intertemporal effort supply

• 成果类型: Article
• 署名作者: Chu, Leon Yang; Sappington, David E. M.
• 署名单位: University of Southern California; State University System of Florida; University of Florida
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2009.00066.x
• 发表日期: 2009
• 页码: 296-316
• 关键词: or-out contracts; limited-liability; incentive contracts; rat race; principal; PERSPECTIVE

摘要

We characterize the optimal contract between a principal and a risk-neutral, wealth-constrained agent when an adverse selection problem follows a moral hazard problem. The optimal contract in this setting often is more steeply sloped for the largest output levels than is the optimal contract in either the standard moral hazard setting or the standard adverse selection setting. The large incremental rewards for exceptional performance motivate the agent to deliver substantial effort both before and after he acquires privileged information about the production environment.